In today's Google earnings call, Google CEO Larry Page said two things that frame why I believe that the Larry Page era is going to be very different from the Eric Schmidt era.
The first was his commentary on how Google thinks about what it is; namely, that he thinks of Google as three businesses:
- Search and Ads;
- Products enjoying high Consumer Success -- YouTube, Android, Chrome;
- New Products like Google+ and Local, where the bet is long term, and the investment is made with an eye to securing returns on that time horizon.
IMHO, this type of framing is great, inasmuch as it gets the company both internally and externally beyond being perceived as a one-trick pony (search and ads), solely defined by revenues and profits.
In other words, it provides a clear context for gauging how Google is going to invest time and effort, as well as a clear demarcation line (especially, internally) on projects that will lose their oxygen if they don't yield results.
Contrast that with the Schmidt era, where it was never clear how all of the various Google projects fed the larger gestalt of the company (other than being cool).
"Exhibit A" is the delta between the Schmidt Way and the Page Way is the deeply flawed launch of Buzz at the tail end of Schmidt's run, contrasted by the highly successful launch of Google+ with Page at the helm.
My only comment regarding the Google buckets is that it would be great to see the company articulate metrics that define what it takes to fit into buckets 2 and 3 (a measuring stick, if you will), although I'd caveat that comment by saying:
- The company is certainly not shy about sharing them post-facto (Google+: 10M users & 1B items shared daily; Android: 550K daily activations; Chrome: 160M users);
- I am guessing that those metrics are codified internally.
The second thing that Page said, which I found resonant, is that Google wants to create products that people use twice a day, "just like your toothbrush."
I love it, inasmuch as if I am working at Google, I'm thinking that we can crush that number, and that there are more of these types of "jobs" that can grow usage from 2 to 5 to 10 times a day.
In other words, Page's crisp articulation simplifies even for the layman outsider how the company grows from a $40B run rate business (i.e., $9B this quarter) to a $200B business in the not too distant future.
What does it all mean? If am an employee, I am psyched because my CEO just defined the step-stones from R&D to Core Consumer Engagement to Cash Cow, and if I am an investor, I now have a mental framework for better understanding the relationship between HOW the company is doing and WHAT the company is doing.
Smart guy, great communicator.
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